Bain Capital Real Estate has formed a partnership with US real estate investment firm Cherry Tree Capital Partners to develop rental townhome communities in Southern California.

The BCT Development partnership will deploy “several hundred million dollars” to develop ground-up, premium rental townhome communities in the next few years.

BCT Development will initially focus on acquiring, entitling and developing land in Southern California’s highest-growth suburban markets with the goal of providing differentiated rental product by way of elevated townhome communities.  

Chris Marsh and Tim Stanley, who launched Cherry Tree Capital Partners in 2021, will lead the partnership.

Stanley said: “Ageing millennials are the fastest-growing demographic in Southern California. As individuals and families continue to migrate to the suburbs, they’re faced with a lack of attainable for-sale housing and quality alternatives. That’s where BCT comes in – meeting this deep need of elevated rental living through our premier townhome communities, all while prioritising affordability by design.”

Marsh said: “Bain Capital Real Estate has a long-standing reputation as a thoughtful, thematic investor who shares our conviction in the multifamily housing space.

“We are thrilled to partner with their team to launch this differentiated and well-capitalised platform to execute on our investment strategy and provide new housing solutions to California residents.”

Martha Kelley, managing director at Bain Capital Real Estate, said: “Our multifamily strategy is closely aligned with our thematic investment approach. In a supply-constrained market with growing consumer demand, we believe there is a significant opportunity to develop premier townhome communities for the high concentration of households in Southern California that have been priced out of homeownership.

“We look forward to a successful partnership with the Cherry Tree Capital Partners team and leveraging the combination of our deep industry expertise to provide renters with high-quality, affordable housing options.”

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